Lesson reading notes
ETFs vs. individual stocks
One stock is one company; an ETF can hold a whole basket.
One company or a basket
Buying one stock ties your result closely to one business. An exchange-traded fund, or ETF, can hold many investments in one purchase.
Spreading out reduces one-company risk
If one holding inside a broad ETF struggles, the others can soften the impact. Diversification reduces risk; it does not remove market risk.
Both have a place
Individual stocks offer focused exposure, while broad ETFs are a simple way to own many companies. The right mix depends on goals and risk comfort.
Continue with Stocks lessons.
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